An option, as understood in connection with real estate, is an agreement which conveys the exclusive right to purchase a definite piece of property for a stipulated price within a specified time. In other words, the term "option" is used to "express the privilege given to conclude a bargain at some future time at a price agreed upon."

THE ALPHA LAND COMPANY Nocatee, Georgia

Received of.........................................................

The sum of..................................................Dollars

For an Option for 30 days at $..................................

on .................................................................

................................................................................................................................

At expiration of this option it can be renewed for 30 days upon payment of $.............., and so on, month by month. It is understood that you acquire no interest in the property until the option payments shall aggregate the sum of $...............and this option is forfeited should you fail to renew it month by month as herein provided. When a total of $..............has been so paid, The Alpha

Land Company will give a lease to the property; and when you have complied with all the terms of said lease, it will give a deed conveying all its right, title and interest in and to the lot... hereinabove described.

The Alpha Land Company, $.............. B............................

(This receipt made in duplicate)

Form 45. Option.

Note: When required, provisions as to roadways, building restrictions, etc., may be included in the option.

Options were originally employed in cases where the purchaser desired time in which to raise the purchase money, to complete an investigation, to confer with partners, or for some similar reason. Of late years, however, they have been used in some instances by the owners of subdivision properties as a preliminary to a regular contract. The plan is useful where the purchaser does not wish to make the full first payment required for a contract, and the vendor does not desire to draw up regular papers until such payment is made.

If this plan is applied to a rent-producing house which the holder of the option is allowed to occupy during the life of his option, care must be taken to see that the rent is properly treated in the accounts. If the rights under the option are exercised, the rent, under the usual arrangement, will form a part of the purchase price. If the option is allowed to lapse, the monthly payments remain as rent. In such cases, the simplest plan is to enter these receipts as rent, and, when a contract is given, to transfer the total of such payments from Rent account to Contracts account. Form 45 is a typical form of option and is self-explanatory.